Out to Shock the World Over Saudi Reserves

[chlamor]

Out to shock the world over Saudi reserves

by Valerie Darroch

As President George W Bush strolled around his Prairie Chapel ranch in Texas last week with Saudi ruler Crown Prince Abdullah, oil prices were high on the agenda during talks between the leaders of the world’s biggest energy consumer and largest oil exporter.

At the same time, Matt Simmons, one of Bush’s energy advisers, was at a conference in Edinburgh, spelling out harsh facts on Saudi oil production which, if proved true, would have severe repercussions for the global economy.

Simmons’s belief is that Saudi has been overstating its oil reserves for years, its biggest oil fields are in decline and it will struggle to live up to its promise to crank up daily output from around 10 million barrels a day to 12 million by 2009 and later 15 million to meet global demand.

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But Simmons says the seeds for today’s problems were sown in the 1970s when US oil majors urged the Saudis to use water injection to get high oil flow rates. Simmons argues that this has led to significantly lower recovery levels. “Big Oil bagged the Saudis … people knew in 1972 that if they produced at those levels it would destroy the reservoirs,” he says. Does he fear the Saudis might want to silence him now?

http://www.energybulletin.net/5806.html

[Eloriel]

1. Oh dear

And the hits just keep coming. Wowee.